Hostname: page-component-cd9895bd7-gvvz8 Total loading time: 0 Render date: 2024-12-26T06:29:24.820Z Has data issue: false hasContentIssue false
  • English
  • Français

The public choice view of international political economy

Published online by Cambridge University Press:  22 May 2009

Bruno S. Frey
Get access

Abstract

An abstract is not available for this content so a preview has been provided. Please use the Get access link above for information on how to access this content.
Image of the first page of this content. For PDF version, please use the ‘Save PDF’ preceeding this image.'
Type
Review Essay
Information
International Organization , Volume 38 , Issue 1 , Winter 1984 , pp. 199 - 223
Copyright
Copyright © The IO Foundation 1984

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1. Spero, J. E., The Politics of International Economic Relations (London: Allen & Unwin, 1977), pp. 1–2.Google Scholar

2. Jones, R. J. Barry, “International Political Economy: Problems and Issues,” Part I, Review of International Studies 7 (1981), pp. 245–60CrossRefGoogle Scholar, and Part II, ibid., 8 (1982), pp. 39–52.

3. See, in particular, Keohane, R. and Nye, J., Power and Interdependence (Boston: Little, Brown, 1977)Google Scholar; Krasner, S., Defending the National Interest (Princeton: Princeton University Press, 1978)Google Scholar; Strange, S., Sterling and British Policy: A Political Study of an International Currency in Decline (New York: Oxford University Press, 1971)Google Scholar; Gilpin, R., War and Change in World Politics (Cambridge: Cambridge University Press, 1981)CrossRefGoogle Scholar; Katzenstein, P. J., “Transnational Relations and Domestic Structures: Foreign Economic Policies of Advanced Industrial States,” International Organization 30 (Winter 1976)CrossRefGoogle Scholar; Katzenstein, , ed., Between Power and Plenty: Foreign Economic Policies of Advanced Industrial States (Madison: University of Wisconsin Press, 1978)Google Scholar; Bergsten, C. F. and Krause, L. B., eds., World Politics and International Economics (Washington, D.C.: Brookings, 1975)Google Scholar; Kegley, C. W. and McGowan, P., eds., The Political Economy of Foreign Policy Behavior (Beverly Hills, Calif.: Sage, 1981).Google Scholar

4. Jones, , “International Political Economy,” Part II, p. 50.Google Scholar

5. See, for example, Tooze, R., “Economics, International Political Economy and Change in the International System,” in Buzan, B. and Jones, R. J. B., eds., Change and the Study of International Relations: The Evaded Dimension (London: Pinter, 1981), pp. 120–37.Google Scholar

6. Jones, “International Political Economy,” Part II, p. 47, and Part I, p. 128. It is, of course, difficult to assess how far views such as those of Jones and Tooze are representative for political scientists engaged in international political economy. The author's impression is that they are rather widespread.

7. As always, there are some notable exceptions. Several political scientists have looked seriously at the public choice literature and have incorporated some aspects into their analyses of international political economy. This applies, in particular, to Conybeare, J. A. C., “International Organization and the Theory of Property Rights,” International Organization 34 (Summer 1980), pp. 307–34CrossRefGoogle Scholar, and to Keohane, R. O., “The Demand for International Regimes,” International Organization 36 (Spring 1982), pp. 325–55.CrossRefGoogle Scholar One exception with respect to fields is the analysis of the conditions for interest representation in questions concerning public goods and its application to cost sharing in alliances, as developed by Olson, M., The Logic of Collective Action: Public Goods and the Theory of Groups (Cambridge: Harvard University Press, 1965)Google Scholar; Olson, , “Increasing the Incentives for International Cooperation,” International Organization 25 (Autumn 1971)CrossRefGoogle Scholar; Olson, and Zeckhauser, R., “An Economic Theory of Alliances,” Review of Economics and Statistics 48 (1966), pp. 266–79.CrossRefGoogle Scholar The effect of interest group rigidities, which make structural change difficult and hamper economic growth, is discussed in Olson, , The Rise and Decline of Nations (New Haven: Yale University Press, 1982).Google Scholar

8. Tooze, , “Economics, International Political Economy,” p. 130.Google Scholar

9. It should be stressed that almost all writers in public choice, including Mancur Olson, consider their work to be neoclassically based.

10. See, in particular, Becker, G. S., The Economic Approach to Human Behavior (Chicago: University of Chicago Press, 1976).Google Scholar Political scientists frequently raise the concern that the “rational” behavior approach has a tautological character. Public choice scholars do indeed try to explain behavior by assuming that individuals act consistently on the basis of known, and well-ordered, preferences. However, they are aware of the danger of simply introducing some new element into the preference function in order to be able to stick to the rationality assumption. As will be seen, the public choice view produces testable propositions, which are nontautological as they can be (and sometimes are) proved wrong by empirical analysis.

11. See, for example, among political scientists, Riker, W. M. and Ordeshook, P. C., An Introduction to Positive Political Theory (Englewood Cliffs, N.J.: Prentice-Hall, 1973)Google Scholar; Frohlich, N. and Oppenheimer, J. A., Modern Political Economy (Englewood Cliffs, N.J.: Prentice-Hall, 1978)Google Scholar. Among sociologists, Coleman, J. S., Introduction to Mathematical Sociology (New York: Free Press, 1964)Google Scholar; Opp, K. D., “Das oekonomische Programm in der Soziologie,” in Albert, K. and Stapf, H., eds., Theorie und Erfahrung (Stuttgait: Klett, 1979), pp. 313–49.Google Scholar In social psychology see the survey by Stroebe, W. and Frey, B. S., “In Defense of Economic Man: Towards an Integration of Economics and Psychology,” Schweizerische Zeitschrift für Volkswitschaft und Statistik 116 (1980), pp. 119–48.Google Scholar

12. Utility maximization lends itself particularly well to a formal analysis, but the public choice approach is by no means incompatible with “satisficing.”

13. On general public choice theory see, for example, Frey, B. S., Modern Political Economy (Oxford: Martin Robertson, 1978)Google Scholar; Mueller, D. C., Public Choice (Cambridge: Cambridge University Press, 1979).Google Scholar

14. As already noted, the public goods concept, following Olson, has been introduced into political-science-based international political economy; for examples see Ruggie, J. G., “Collective Goods and Future International Collaboration,” American Political Science Review 66 (1972), pp. 874–93CrossRefGoogle Scholar; Snidal, D., “Public Goods, Property Rights, and Political Organizations,” International Studies Quarterly 23 (1979), pp. 532–66CrossRefGoogle Scholar; Oppenheimer, J., “Collective Goods and Alliances,” Journal of Conflict Resolution 23 (1979), pp. 387–407CrossRefGoogle Scholar. See also the articles collected by Loehr, W. and Sandler, T., eds., Public Goods and Public Policy (Beverly Hills, Calif.: Sage, 1978)Google Scholar, and by Sandler, T., ed., The Theory and Structure of International Political Economy (Boulder, Colo.: Westview, 1980).Google Scholar The property rights approach to deal with externalities and public goods in the international political economy is well discussed in Conybeare, “International Organization and the Theory of Property Rights.”

15. Kindleberger, C. P., Government and International Trade, Princeton Essays in International Finance no. 129 (Princeton, N.J., July 1978).Google Scholar

16. Marwell, G. and Ames, R. E., “Economists Free Ride, Does Anyone Else? Experiments on the Provision of Public Goods,” Journal of Public Economics 15 (1981), pp. 295–310CrossRefGoogle Scholar; Schneider, F. and Pommerehne, W. W., “Free Riding and Collective Action: A Laboratory Experiment in Public Microeconomics,” Quarterly Journal of Economics 96 (1981), pp. 687–704.CrossRefGoogle Scholar

17. There is a close analogy to the “social consensus” or “constitutional contract” among individuals and groups within a country. See Buchanan, J. M. and Tullock, G., The Calculus of Consent (Ann Arbor: University of Michigan Press, 1962)CrossRefGoogle Scholar; Buchanan, , Freedom in Constitutional Contract: Perspectives of a Political Economist (College Station: Texas A & M University Press, 1977)Google Scholar; Frey, B. S., Democratic Economic Policy (Oxford: Martin Robertson, 1983).Google Scholar

18. See, for example, the articles in Sandler, Theory of International Political Economy. The “rules approach” has only recently been applied in classical international relations; see Cohen, R., International Politics: The Rules of the Game (London: Longman, 1981).Google Scholar In political scientists' international political economy, it has, on the other hand, always played an important role; see, for instance, Keohane and Nye, Power and Interdependence, on rules about money and oceans, Young, O. R. on Resource Regimes (Berkeley: University of California Press, 1982)Google Scholar, and in general the survey by Jones, “International Political Economy,” Part I.

19. This has been done in particular by Cohen, B. J., Organizing the World's Money: The Political Economy of International Monetary Relations (London: Macmillan, 1977)CrossRefGoogle Scholar; and Hamada, K., “On the Political Economy of Monetary Integration: A Public Economics Approach,” in Aliber, R. Z., ed., The Political Economy of Monetary Reform (London: Macmillan, 1977).Google Scholar

20. See Willett, T. D., “Some Aspects of the Public Choice Approach to International Economic Relations” (Paper prepared for the European University Institute Conference on “New Economic Approaches to the Study of International Integration: Applications of Economic Analysis to Political Decision-Making,” Florence, 31 May-2 June 1979, revised 1980).Google Scholar

21. See in particular Tollison, R. D. and Willett, T. D., “Institutional Mechanisms for Dealing with International Externalities: A Public Choice Perspective,” in Amacher, R. C. and Sweeney, R. J., eds., The Law of the Sea: U.S. Interest and Alternatives (Washington, D.C.: American Enterprise Institute, 1976)Google Scholar; Wijkman, P. M., “Managing the Global Commons,” International Organization 36 (Summer 1982), pp. 511–36CrossRefGoogle Scholar; Young, Resource Regimes. International resources should not always be considered common property; they are sometimes a private property, as argued by Sweeney, , Tollison, , and Willett, , “Market Failure, the Common-Pool Problem, and Ocean Exploitation,” Journal of Law and Economics 17 (1974), pp. 179–92.CrossRefGoogle Scholar

22. See Whiteley, P., ed., Models of Political Economy (London: Sage, 1980)Google Scholar; and Hibbs, D. A. and Fassbender, H., eds., Contemporary Political Economy: Studies on the Interdependence of Politics and Economics (Amsterdam: North-Holland, 1981)Google Scholar; and the survey by Frey, B. S., “Politico-Economic Models and Cycles,” Journal of Public Economics 9 (1978), pp. 203–20.CrossRefGoogle Scholar

23. Paldam, M., “A Preliminary Survey of the Theories and Findings on Vote and Popularity Functions,” European Journal of Political Research 9 (1981), pp. 181–99.CrossRefGoogle Scholar

24. This does not, of course, exclude effects of the balance of payments on the polity through other macroeconomic variables, such as the rate of inflation or the rate of unemployment.

25. First by Mueller, J. E., “Presidential Popularity from Truman to Johnson,” American Political Science Review 64 (1970), pp. 18–34CrossRefGoogle Scholar

26. T. D. Willett, “Some Aspects of the Public Choice Approach to International Economic Relations,” and Willett, and Mullen, J., “The Effects of Alternative International Monetary Systems on Macroeconomic Discipline and Inflationary Biases,” both in Lombra, R. and Witte, W., eds., The Political Economy of International and Domestic Monetary Relations (Ames: Iowa State University Press, 1982).Google Scholar

27. Richardson, L. F., Arms and Insecurity (Pittsburgh: Boxwood, 1960)Google Scholar.

28. See, for example, Luterbacher, U. and Allan, P., “The Economic and Social Burden of Arms Races: A Computer Simulation of Interactions among Major Powers,” mimeo (Geneva: Graduate Institute of International Studies, 1978)Google Scholar; Luterbacher, and Imhoff, A., “The U.S. Politico-Economic System: An Analysis of Interactions between Popularity and Governmental Military and Civilian Expenditures,” mimeo (Geneva: Graduate Institute of International Studies, 1980).Google Scholar

29. This statement has to be qualified. It only holds if the shift to free trade does not cause a country's terms of trade to deteriorate so much that its real income falls. This would not happen for small countries, and even for very large countries (such as the United States) the possible terms-of-trade effect is very unlikely to dominate the welfare-increasing effect of free trade. The issue of the optimality of free trade also looks somewhat different if the role of reciprocity in contemporary international trade relations is taken into account; see, for example, Roessler, F., “The Rationale for Reciprocity in Trade Negotiations under Floating Currencies,” Kyklos 31 (1978), pp. 258–75.CrossRefGoogle Scholar

30. For the following see Baldwin, R. E., The Political Economy of U.S. Trade Policy, The Bulletin 1976–4 (New York University: Center for the Study of Financial Institutions)Google Scholar.

31. This has already been pointed out by Downs, A., An Economic Theory of Democracy (New York: Harper, 1957)Google Scholar, and by Olson, Logic of Collective Action.

32. The original idea is due to Tullock, G., “The Welfare Costs of Tariffs, Monopolies and Theft,” Western Economic Journal 5 (1967), pp. 224–32Google Scholar, and to Krueger, A. O., “The Political Economy of the Rent-Seeking Society,” American Economic Review 64 (1974), pp. 291–303.Google Scholar Pertinent articles are collected in Buchanan, J. M., Tollison, R. D., and Tullock, G., eds., Towards a Theory of the Rent Seeking Society (College Station: Texas A & M University Press, 1980).Google Scholar

33. Bhagwati, J. N. and Srinivasan, T. N., “Revenue Seeking: A Generalization of the Theory of Tariffs,” Journal of Political Economy 88 (1980), pp. 1069–87CrossRefGoogle Scholar; Bhagwati, , “Directly Unproductive, Profit-seeking (DUP) Activities,” Journal of Political Economy 90 (1982), pp. 988–1002.CrossRefGoogle Scholar

34. See, for example, Brams, S. J., Game Theory and Politics (New York: Free Press, 1975)Google Scholar, or Mueller, Public Choice.

35. Findlay, R. and Wellisz, S., “Some Aspects of the Political Economy of Trade Restrictions,” Kyklos, 36 (1983), pp. 469–80.CrossRefGoogle Scholar

36. Baldwin, , Political Economy of U.S. Trade Policy, pp. 29–37.Google Scholar

37. Magee, S. P., “Protectionism in the United States,” mimeo (University of Texas at Austin, Dept. of Finance, 1982).Google Scholar

38. Takacs, W. E., “Pressures for Protectionism: An Empirical Analysis,” Economic Inquiry 19 (1981), pp. 687–93.CrossRefGoogle Scholar

39. See the economic theory of bureaucracy as developed by Tullock, G., The Politics of Bureaucracy (Washington, D.C.: Public Affairs Press, 1965)Google Scholar; Downs, A., Inside Bureaucracy (Boston: Little, Brown, 1967)CrossRefGoogle Scholar; and Niskanen, W. A., Bureaucracy and Representative Government (Chicago: Aldine Atherton, 1971).Google Scholar

40. Pincus, J. J., Pressure Groups and Politics in Antebellum Tariffs (New York: Columbia University Press, 1977)Google Scholar. An early analysis of historical tariffs in the political economy tradition is Kindleberger, C. P., “Group Behavior and International Trade,” Journal of Political Economy 59 (1951), pp. 30–46CrossRefGoogle Scholar; more recently, Gourevitch, P. A., “International Trade, Domestic Coalitions, and Liberty: Comparative Responses to the Crisis of 1873–1896,” Journal of Interdisciplinary History 8 (1977), pp. 281–313.CrossRefGoogle Scholar

41. Caves, R. E., “Economic Models of Political Choice: Canada's Tariff Structure,” Canadian Journal of Economics 9 (1976), pp. 279–300.CrossRefGoogle Scholar

42. Helleiner, G. K., “The Political Economy of Canada's Tariff Structure: An Alternative Model,” Canadian Journal of Economics 10 (1977), pp. 318–26CrossRefGoogle Scholar; Helleiner, , “Transnational Enterprise and the New Political Economy of U.S. Trade Policy,” Oxford Economic Papers, N.S. 29 (1977), pp. 102–16.CrossRefGoogle Scholar

43. For example, Tharakan, P. K. M., “Political Economy of Protection: An Empirical Investigation of the Belgian Case,” World Bank Staff Working Paper no. 431 (1980)Google Scholar; H. H. Glismann and F. D. Weiss, “On the Political Economy of Protection in Germany,” ibid., no. 427 (1980).

44. Olson, Logic of Collective Action.

45. Russett, B. M. and Sullivan, J. D., “Collective Goods and International Organization,” International Organization 25 (Autumn 1971), pp. 845–65.CrossRefGoogle Scholar

46. This has been demonstrated empirically by Frei, D., Internationale Zusammenarbeit: Theoretische Ansätze und empirische Beiträge (Königstein: Hain, 1982).Google Scholar

47. Conybeare, , “International Organization and the Theory of Property Rights,” p. 308.Google Scholar The author dismisses the supranational authority approach, calling it “impractical” and “undesirable.” The discussion of international regimes in International Organization 36 (Spring 1982)Google Scholar, especially the contributions by R. O. Keohane, J. G. Ruggie, C. Lipson, and B. J. Cohen, on aspects of economic regimes, is immediately relevant to this issue.

48. Olson and Zeckhauser, “An Economic Theory of Alliances.” For subsequent work in this direction see Kennedy, G., Burden Sharing in NATO (London: Duckworth, 1979)Google Scholar, or Reisinger, W. M., “East European Military Expenditures in the 1970s: Collective Good or Bargaining Offer?” International Organization 37 (Winter 1983), pp. 143–55.CrossRefGoogle Scholar Both authors find that empirical evidence only confirms the Olson-Zeckhauser hypothesis on some periods, and that additional explanatory factors are needed.

49. Fratianni, M. and Pattison, J., “The Economics of International Organizations,” Kyklos 35 (1982), pp. 244–62.CrossRefGoogle Scholar

50. This point has also been stressed by Kindleberger, C. P., “Dominance and Leadership in the International Economy—Exploitation, Public Goods, and Free Rider,” International Studies Quarterly 25 (1981), pp. 242–54.CrossRefGoogle Scholar

51. This is an application of the general analysis provided in Buchanan and Tullock, Calculus of Consent.

52. Dreyer, J. S. and Schotter, A., “Power Relationships in the International Monetary Fund: The Consequences of Quota Changes,” Review of Economics and Statistics 62 (1980), pp. 97–106.CrossRefGoogle Scholar

53. Basic treatments are Arrow, K. J., Social Choice and Individual Values, 2d ed. (New York: Wiley, 1963)Google Scholar, and Sen, A. K., Collective Choice and Social Welfare (Edinburgh: Oliver & Boyd, 1970).Google Scholar

54. Mueller, D. C., “Voting by Veto,” Journal of Public Economics 10 (1978), pp. 57–75.CrossRefGoogle Scholar

55. Klevorick, A. and Kramer, G. H., “Social Choice in Pollution Management: The Genossenschaften,” Journal of Public Economics 2 (1973), pp. 101–46.CrossRefGoogle Scholar

56. Tideman, N. and Tullock, G., “A New and Superior Process for Making Social Choices,” Journal of Political Economy 84 (1976), pp. 1145–59CrossRefGoogle Scholar; applications to international problems are suggested by Vickrey, W., “Demand-revealing Procedures and International Disputes,” Papers, Peace Science Society (International) 28 (1978), pp. 97–104.Google Scholar

57. It is only “nearly” Pareto-efficient because the tax receipts must be wasted in order not to bias the vote. This problem is of little practical importance.

58. Niskanen, Bureaucracy and Representative Government.

59. Tollison, R. D. and Willett, T. D., “An Economic Theory of Mutually Advantageous Issue Linkages in International Negotiations,” International Organization 33 (Autumn 1979), pp. 425–49.CrossRefGoogle Scholar Their approach is critically discussed by Sebenius, J. K., “Negotiation Arithmetic: Adding and Subtracting Issues and Parties,” International Organization 37 (Spring 1983), pp. 281–316.CrossRefGoogle Scholar